Gracenomics

Retired attorney foams at mouth over certain big business practices, especially those which victimize just plain folks, and drools over good bargains and favorite things and places. First order of business: gas drilling in the Marcellus Shale

Thursday, March 3, 2011

This is my first post for a long while, though I certainly have never abandoned the cause against gas drilling. Governmental hedging is really making me angrier than ever, and posting my Comment to the DRBC is a form of yelling "foul":
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COMMENT, DRBC DRAFT REGULATIONS ON NATURAL GAS March 3, 2011

Thank god for the few level heads in government capable of seeing the forests through the alluring vapors of natural gas. I mean Maurice Hinchey, Edward Markey, and Bob Casey. Not, alas, the commissioners of the DRBC, who, having served their famous charge so well in the past, are now prepared to condemn it to despoliation and have no defensible ground for doing so.

The Commission still has not responded to Congressman Hinchey’s angry questions in a letter of last September to General deLuca, challenging the dubious mandate (to “support the economic needs of the (Marcellus Shale) region and the nation’s need to secure energy”) that led to the decision to open up the Delaware Basin to gas drilling. Indeed, there is no answer. There is nothing in the Commission’s Comprehensive Plan or the Compact or other agency document which allows economics or energy needs to trump the Commission’s proper mission of protecting this valuable waterway.

There can be little doubt that the “thousands of drilling sites” that the Commission expects in the pristine, unpopulated Upper Delaware portion of the Basin [Draft Regulations, 7.4(b)(2)] will have significant impacts, and the Commission concedes that [Draft Regs 7.4(b)(1)]. It has taken years for the public to penetrate the treacherous industryspeak that has promised us clean energy, safely delivered, with economic enticements thrown in. Government has had a hand in keeping us in the dark. But now we know the twin reality: the nation is swimming in a surplus of already-extracted natural gas for which storage is unavailable, and the downsides of the process of hydrofrack drilling are getting uglier by the day*. The delivery of energy from thousands of wells in the Basin is unneeded and cannot at this time be made safe for the River and the millions who depend on it.

As I believe the issuance of these regulations is unauthorized, I won’t detail what I perceive to be their shortcomings, except to state that their reliance on weak member- state staffing and standards, e.g., wellbore cementing, which have been shown to be deficient, is an invitation to trouble, and that a puny 500-foot setback from the River is outrageous and ob-scenic.

You have the power and the obligation to do the right thing by one of the last pristine, free-flowing rivers in our part of the world: to ban gas drilling from the Basin. I am asking you to act on them.

Sunday, May 9, 2010

My little Sullivan County town seems to have caught the petrophilia virus from the state Department of Environmental Conservation. The symptoms are acute myopia and – a new word to me – paralogia, a type of reasoning disorder.

While the rest of us have been riveted to the point of distraction by photos and stories on the latest legacies of fossil fuel mania in West Virginia and the Gulf of Mexico, these two paladins have been preparing the way for New Yorkers to experience these legacies first-hand. What a pair. Both appear to think they can play the role of David and tame the savage Goliath by being a welcoming host. History says otherwise.

The step my town is taking is to amend its zoning to provide that gas drilling will be a permitted use, subject to “special use” restrictions, throughout districts which comprise 90% of the town’s land area. I’m not sure yet why the town thinks this is a good idea and I’m going to assume for now that its intentions are defensive. But I am quite sure that substantially all those special use restrictions, setbacks being only one example, will fall within the ambit of the DEC’s regulatory scheme which, legal authorities agree, will therefore place them off-limits to local enforcement.

As everybody knows, the DEC, with its shrunken corps of inspectors, is not set up for much enforcement itself. So what is likely to happen? Well, a driller who has been invited in, subject to special use, may wish to knock out those special use restrictions by tying up the town in litigation – the towns’ greatest of all fears -- and with a pretty good cause of action, at that, meanwhile banking on inaction by the DEC. The invitation and the fray will logically attract more drillers, who, like water, have repeatedly displayed a tendency to run toward the places of least resistance, and the operations of those drillers will be similarly ungoverned. This is the way they behave; I’m not making this up. Our town, as Keith Lambert, the mayor of Rifle, Colorado predicted, will be overrun. He knows. His almost was. Dish, Texas, really was. Its mayor, Calvin Tillman, came to New York communities at his own expense to warn about the realities of drilling.

It is still hard for me to believe that a ‘smart’ state like New York can’t take its cues from the messes that cutting-edge fossil fuel extraction has caused elsewhere; that it fails to take note of the dawning awareness on the part of other governments and agencies that the trade-offs are unreasonable; that it cares so little about its beautiful environment and its rural communities to leave them scrambling to protect themselves by whatever misguided means. Good intentions or not, my rural town, which sits on the upper Delaware River, could end up an industrial zone and a major polluter of the river for millions of downstream users.

I will be joining the local dialog and doing what I can to see that common sense prevails here. But it may take millions of protesters to see to it that common sense prevails in Albany.

Monday, May 3, 2010

The New York Times reported on April 23 that the main reason given by Commissioner “Pete” Grannis for deciding that stricter standards – instead of an outright ban – should be applied to prospective hydraulic fracture gas drilling within New York's and Syracuse's watersheds, was a grave concern about landowner lawsuits. It “risks very substantial litigation,” he said.

Lawsuits by whom? Is he referring to landowners in the watersheds who may have been hedging th eir bets, dickering over lease terms but ready to sign and reap bonuses at such time as the DEC overcame city opposition? No standing there that I can see. Signed-up landowners contending that royalties are due them even though they cannot establish that recoverable gas exists under their land? A speculative damages claim. Would the DEC be a proper party were a landowner to claim a vested right to use his property industrially (whether or not it is so zoned or whether or not the use constitutes a public or private nuisance under New York common law)? Was the DEC a party to his lease? Did the DEC warrant that his property would be drilled? I really, really doubt it. This compromise seems intended , instead, to get out of the sights of angry, powerful City pols and to divide their alliances with upstate protesters, without looking wimpy to the gas industry.

Those allegedly litigious landowners can read, I'm sure. They're reading that the stricter standards will mean no drilling anyway. What's the difference?

The Commissioner should worry about litigation, but he should be looking, instead, in the other direction. He should be worried about the claims of third parties who may, and likely will, suffer the collateral effects of gas drilling that the DEC will have permitted, whether those parties be in these watersheds or elsewhere.

This is where I come to my pet theme: that if the DEC continues on its present course , putting the environment and the health, safety, and welfare of people at risk in order to provide for the efficient development of oil and gas, it will be in breach of its public trust. A nice basis for a lawsuit.

Readers may have heard DEC officials stating that their job under the Environmental Conservation Law is to promote, foster and encourage the efficient development of these resources. And you might think that was true from reading the language of Section 550.1 (a) in the Code of Rules and Regulations (6 NYCRR 550.1), which the Department or its predecessor prepared for the administration of the oil and gas portion of the Environmental Conservation Law (the “ECL”). It describes the agency's mission as “the fostering,encouragement and promotion of the development, production and utilization of oil and gas... in such a manner as to prevent waste.” (Italics mine.) But this is not what the law actually provides. Way back in 1978 (by Laws of 1978, Chapter 396) the legislature changed the wording of the source statute, ECL Article 23, Section 0301, to its current language. It substituted the word “regulate” for all these promoting verbs. Despite prodding, the DEC did not correct the Code language and continues to disregard the error.

A careful reading of the ECL itself, including the definitions section, ECL 23-0101, also shows that preventing “waste” does not mean making sure the greatest amount of oil or gas is recovered from each formation or spacing unit. “Waste” refers to oil or gas permanently lost in the development process– the stuff that escapes into underground fractures or into people's water supplies and cannot "ultimately" be recovered. So, the ECL does not authorize the DEC to proceed with development and issue permits without having in place an effective program to prevent the escape of gas. There isn't one yet. It now turns out that the type of cement that has been approved by DEC for sealing well bore joints cannot withstand the pressures of deep-shale drilling and is to blame for many of the migrations of gas and other toxins into Pennsylvania streams and well water. Geologists have expressed concerns that the deep rock of New York's Marcellus is highly fractured and variable, potentially giving rise to uncontrollable migration of gas outside of wellbores.

The capstone of the “breach” cause of action is the relationship between ECL 23-0301 and the “mother” policy set forth in ECL Article I, Title I. That policy governs everything in the entire statutory scheme that the DEC oversees. It must therefore be reconciled with, and read into, ECL Article 23 . Article I, Title I describes the overriding mandate of the DEC as “to conserve, improve and protect (the state's) natural resources and environment and to prevent, abate and control water, land and air pollution in order to enhance the health, safety and welfare of the people of the state and their overall economic and social well being”, plus other consistent goals expressed in that Title. Note that there's nothing here about developing natural resources. It's quite plain that the legislature's intention was that the DEC serve, through its permitting and regulatory functions, as a check on the development of oil and gas, not as its promoter. So, unless and until a program is in place that renders the process of gas development a virtually harmless undertaking, environmentally, economically and socially, the DEC should not be contemplating issuing any drilling permits anywhere. Proceeding forward now, with knowledge of the hazards and with no adequate regulatory forces to tame them, is an invitation to lawsuits.

There's still time for the Commissioner to back away from the precipice, either by instituting a blanket ban or by holding off until such time as drilling in the Marcellus Shale comports with the protective policy of the DEC's enabling law.

Friday, April 9, 2010

In the past few weeks an impetus has been building in New York to delay the commencement of the natural gas play until the EPA concludes its two-year study on hydraulic fracturing. Activist groups have petitioned the DEC to hold off issuance of its final sGEIS until the report is in. Meanwhile, a bill is circulating in the legislature providing for a two-year moratorium on gas drilling.

For nearly two years now, many of us have been questioning what the hurry was, anyway, because of the bad news on the impacts of “unconventional” gas development in Texas, Colorado and Pennsylvania. We knew the gas in the Marcellus Shale, then as now, was not in danger of drying up or dribbling away. Since that time, facts have come to light about the drilling process and the industry, about international energy dynamics, and about politics, culminating in the 2005 Energy Policy Act, that have helped to reveal the forces behind the pressure to drill and to put the drilling debate in perspective. There’s no sound reason for New York to hurry.

The industry continues to pound impatiently on New York’s door and to warn that if the state gives it too hard a time it will have to hurt us all by walking away. Never mind my personal response to this threat. Even from the industry’s own point of view, it makes no sense. True, a dollar today is worth more than a dollar two years from now. But the price of gas is presently depressed, and will presumably go lower yet as more of it is recovered. That means gas companies will realize less value for each mcf of New York gas they drill now than they will if they wait until a time when it is in scarcer supply. As there is no present capacity for stockpiling gas, there is no price float to benefit them, either.

The same is true for the state, in terms of taxes to be realized, and for landowners in terms of royalties payable to them, since both are measured by the price of the gas produced. I, for one, am unsympathetic to the respective interests of the State fisc and the hard-up landowners in getting a “quick fix” now, because evidence is mounting on the extent of collateral damage that may be inflicted upon our citizens in order to provide it to them. Part of that evidence suggests that the losses to the state and its communities from an immediate gas play, even in purely economic terms, may end up outweighing the gains. (I advert here to the study that was the subject of my March 31 post, and to another look at the economics in a webinar.

So, a quick fix for the state from the riches of the Marcellus Shale is probably a pound-foolish delusion. As for the landowners who believe that “their” gas entitles them to special consideration, they need to be reminded that when they leased away certain rights in their own land, they also gave away, free of charge, many of the rights of their neighbors to enjoy their own lands, as well as the security of the water supplies of people in distant downstream regions. That somehow fails to make their needs a priority for the rest of us.

Two years will serve to cool many heads. By the end of two years, there should be some useful published statistics on the human health impacts within drilling communities in other states, and on the communities’ economic health as well. There should also be progress in the unsettled matter of how to treat and safely dispose of the large-scale toxic wastes produced by hydraulic fracture drilling.

In two years, too, technology will change. The Halliburton formula could by then be superseded by something far safer. Whatever happened to fracking with propane, the process tested in eastern Canada and alleged to be safer and more efficient ? Could it work in deep shale?

In the meanwhile, two years lost to gas drilling will mean two years of confidence that the water we drink won't have stuff like toluene in it, and two years for safer sources of energy to take hold in New York.

By way of a postscript, I add that moving precipitously ahead with drilling in New York will NOT aid U.S. efforts to become energy-independent. Gas will not supplant mid-eastern oil until such time as gas applications become as broad as oil’s. We will need to keep importing oil until we’ve got natural gas cars and trucks. We’re not there yet. In the interim, New York’s supply , given the current glut in the U.S., will doubtless flow overseas: perhaps (who knows?) to Saudi Arabia.

Wednesday, March 31, 2010

Here's a paper on the economic potential for gas drilling in New York's Marcellus shale region, prepared by an economist, Dr.Janette Barth, who's really done her homework. She urges that officials take the time now to look beyond the gas industry's projections of prosperity at some hard, cold statistics that point in another direction. These come both from New York's own history with natural gas exploitation and from the recent experiences of other states with deep-shale drilling using the hydraulic fracturing techniques to be used here.

None of this comes as a surprise to me. The only surprise is that no one in government seems willing even to verify the economic realities before setting our ship of state on such a dangerous course.

Tuesday, March 30, 2010

It seems that, of all Obama’s appointments, the EPA’s Lisa Jackson is emerging as the best friend of the people who elected him – albeit under considerable pressure from Congress and demonstrators. Lately the agency has not only undertaken to review the environmental effects of hydraulic fracture gas drilling nationwide, but, in West Virginia, has proposed toveto a permit that the Army Corps of engineers had already approved for a large mountaintop-removal coal mine. This is a big reprieve for poor West Virginia. In recent years it has had to endure the despoliation of its land and communities by both Granddaddy Coal and its fat and gassy stepchild, which is now drilling in southern edge of the Marcellus shale. Of course, that’s in part because West Virginia is ... poor. But the fact of politics is that this kind of large-scale despoliation happens in rich states, too.

I listened this morning to a WBAI interview with Jeff Biggers, author of a new book about coal, Reckoning at Eagle Creek. A journalist and the grandson of a coal miner, Biggers outlined the deceptive mantras of the coal industry which, together with massive political contributions, successfully kept legislators and regulators off its back for generations. Jimmy Carter, having promised to ban strip mining during his campaign, apparently learned how difficult it was push back against such a powerful industry, and never acted on his promise.

Coal was cheap as long as no one tallied its environmental and health consequences or gave any thought to cleaning up its messes, and it’s been long embedded in our national culture as the principal source of electric energy. The “jobs” mantra has played a substantial role in the schmeer effort by Big Coal even though it has turned out that jobs have considerably shrunk over time, owing in part to the mechanization of the strip mining process. Over the same time, the governmental response to coal issues, Biggers says,-- even where the causal connection between strip mining and environmental or health damage was demonstrated -- has been a predictable compromise: to minimize the environmental damage rather than to curtail the particular practice that perpetuates it.

Now, Coal has convinced many, including Obama himself, that it can be “clean”. The industry has spent not one dime, says Biggers, to develop clean coal, but it claims that underground sequestration of carbon will curb the emissions that contribute to global warming. The industry doesn’t mention that the sequestration process in itself requires considerable energy, and thus more coal to burn and more money in Coal pockets.

Here in New York’s portion of the Marcellus region, the not-so-flush southern tier, West Virginia history seems about to repeat itself with natural gas. Gas may be cleaner than coal, but not while it’s being produced. The promise of tax revenues and other income to the state from gas drilling, and the deceptive promises of local community revival which I have reviled in previous posts, have blinded officials to the vast environmental damage that will result if anything like the officially projected quantity of deep shale wells is ever realized. Our New York regulator is firmly rooted to the compromise strategy of minimizing environmental damage from natural gas drilling by, e.g., providing setbacks measured in 100 or fewer feet (your pond must be at least 50 feet downstream of a gas well), and resolutely ignoring the compounding of negative impacts where more than one well is sited in a particular environment. The spills, methane migrations, and illegal dumpings across the border in Pennsylvania and in other gas-rich states, the unusual concentrations of disease symptoms within drilling communities, the economic ill health of many post-drilling communities – none of these things is leading toward any official determination in New York that drilling should be banned or limited. It seems instead to have brought on one-upmanship – Hey, our guys (all sixteen of them) can do this better than you!

We can hope that the EPA’s promised new study of “hydrofracking” won’t be too little and too late to avert serious toxic disaster. It is an entirely new EPA from the one under the Bush administration which simply cleared the path for whatever industry wanted to do. The agency’s 2004 study of the process, which concluded that hydraulic fracturing posed “little or no threat to drinking water”, did not even involvewatertesting. It is that flawed conclusion that the gas industry touts every time it fears that state officials will wise up to the true facts.

If you are a New Yorker, be sure to sign thepetition to the DEC demanding that it wait for the EPA study results before issuing any permits for hydraulic fracture drilling.

Thursday, March 25, 2010

Renewable energy sources are a long time in developing, and some of them already have their critics. Windmills are unsightly, some say. Solar just isn’t powerful enough. Geothermal isn’t right for everyone’s needs. Meanwhile, we’ve got great quantities of mile-deep natural gas (“Cleaner than coal!” “Cleaner than oil!”) to keep our nation’s busy engines churning. Why not just grab what there is and face up to our energy problems when it runs out?

Well, lots of reasons, most of which have been thoughtfully enumerated. Aside from fossil fuel emissions that contribute to global warming, Americans need to reconsider the profligacy with which we have come to consume energy, which is out of whack with our awareness that we have only a diminishing supply of fossil fuel to use to perpetuate the consumption.

Natural gas is being seen, especially by that wheeler-dealer, Mr Pickens, as the replacement for oil, not just for preparing the way for renewables but for heating and so that trucks can continue criss-crossing the country to deliver food and other products from remote centers to places where they could just as easily have been produced. As long as we keep thinking this way, we will continue turning up the thermostat to keep our leaky houses warm. The availability of gas, in other words, allows us to ignore both reality and common sense. It’s time to think both smaller and smarter.

Harvesting gas is not clean, as many commentators have noted. Nor is it economical, broadly speaking. It clearly pays off for the industry itself, or players would not be darkening the sky above shale formations like crows over a cornfield. They, of course, need not live with the dirty consequences of their work; when their feast is over, they can fly home. Newly rich land lessors, also, can take their money and run. I think many of the rest of us have wised up to the seductive promises of prosperity and have come to realize that the economic costs of coping and cleanup can equal or exceed the income to be realized. Last month, Calvin Tillman, mayor of Dish, Texas, told listeners in Callicoon, New York that his initial hopes of economic benefit for his little town were quickly dashed, that the tax base had dropped, and that he couldn’t blame anyone for not wanting to live in a place where breathing is a health hazard. The economic calculation does not begin to address the health and environmental consequences that simply can’t be cleaned up.

One of these days, clean and green technology will take hold. But if Mr. Pickens has his way, it will be too late for it to restore quality of life to the shale regions that will have given their all to the energy market. The money and the jobs will have moved away, leaving a sad landscape which a photographer from Syracuse, Laura Brazak, has envisioned as the dystopian future of the Marcellus:

“All the money is gone. We're living in an industrial wasteland that used to be our pristine environment. We're waiting for the first of many water treatment facilities to come online and in the meantime we're drinking bottled water. Somewhere down the road, we're trying to fix the roads which got ruined from the truck traffic. There are clusters of cancers and respiratory issues and skins rashes. The air smells funny. And there is no money to even begin cleaning up the mess. Mortgage companies cancel your mortgage insurance because your well water has become contaminated. People start to move away. Agriculture suffers and the vineyards and wineries close. Tourism tanks. Rich people stop sending their kids to Syracuse University and our other fine colleges until the "water situation" is rectified. The organic farmers have left and what was beginning to be a slow food movement dies on the vine. The plan to revitalize downtown gets put on hold again and all the money goes to clean up the sites of old drill pads and to try to find companies capable of dealing with environmental disasters of this magnitude--but they are all busy in Pennsylvania....”

What a shame not to have slowed down and concentrated on renewables in the first place. These may ultimately include different technologies we haven’t heard so much about, such as....algae farms. I read
that the chemical composition of at least some algae is identical to that of gasoline. Apparently algae as potential fuel is quite efficient, besides being eminently cultivable. Who could find this objectionable? There is something deeply satisfying about the notion of being able to apply what has been regarded as a pestilence to the solution of a major worldwide problem. And the best part? The wastes can be fed to cows!